Unilever is one of the world's leading suppliers of fast moving consumer
goods across food, home and personal product categories. Their products are distributed in 30 countries.
We've been
doing a lot of thinking about simulations for Unilever and we feel that it could radically transform the way they launch new
products. It will help them figure out which marketing initiatives to pursue and when to do them. Why? Partly because of the
power of simulation science for capturing insights into the soft and fuzzy -- Is the advertising great or does it suck? Will
consumers love our product or just think it's so-so? Will Wal-Mart gives us more shelf space than our competitors? What
other brands of ours will we cannibalize and how much? We can simulate a thousand different worlds, identify the most likely
and then make it happen.
Through workshops we introduce marketing teams to the power of using simulations for improving
their product launches. We can track the impact of consumer need, advertising, share of voice, availability and experience
and create extremely accurate scenarios that provide unrivaled foresight.
We can also simulate (easily AND cheaply)
supply, economic forces, sales, promotions and competition.
There are several advantages of leveraging the investments
that Unilever has already made into SAP by adding a simulation layer to their IT systems:
- Using our simulations,
Unilever Brand Directors will have foresight into the likely outcomes of marketing initiatives via scenario analysis using
the synthetic environment.
- Our technologies enable attitude data to be used to inform the strategic decision making
process.
Finally, Brand Directors and Finance Directors can stop fighting:
Ms. Finance tells
Mr. Brand -- "Hey, these projections are WAY TOO OPTIMISTIC!"
Mr. Brand and Ms. Finance then log into the secure
simulation extranet and play a couple of games.
"No, no, no, we don't need to spend $20 million on media, we should
use other activation tools such as kick-ass displays and creative trials" says Mr. Brand.
They change the
ad spend to $10 million and add $5 million for trials and play the game to see how everything might unfold.
Over the
phone (because Ms. Finance is in Germany and Mr. Brand is in Connecticut) they finally agree on a plausible scenario, print
out the pro forma P& L (and load it into SAP-SEM to create an audit trail) and part ways happy with their consensus view
on a plausible future outcome for this new product.
The project gets the green light and goes swiftly thru the contract
gate to the launch gate. They are now only 3 months from product launch.
So what? Well, based on interviews with people
around the world, the ROI may reach $500 million over three years. Plus, we're convinced that we can shorten new product
launches from an average of eight months to as little as six months.
And, as Ben Franklin said, Time IS Money!!
© Justin Lyon. 2005– Present. Reproduction permitted with reference to source.
href="http://justinlyonandsimulation.blogspot.com/2005/08/2006-tipping-point-for-simulation.html">2006 - The Tipping Point for Simulation Science
Selling Simulation Science
What is Simulation Science?